]]>TORONTO – The phasing-out of the penny will lurch ahead today with the Royal Canadian Mint officially ending its distribution of one-cent coins to Canada’s financial institutions.

The move comes nearly a year after Finance Minister Jim Flaherty announced the demise of the penny, whose production cost came to exceed its monetary value.

But as it faces extinction in the pockets and tills of most Canadians, the humble penny is still in demand in some artistic circles where it retains significant value.

Renee Gruszecki, a Halifax-based academic and archivist, has spent the past year making a living through a jewelry business devoted primarily to preserving the country’s stray cents.

About 30,000 strategically sorted pennies fill Gruszecki’s home and eventually find their way into the accessories produced at Coin Coin Designs and Co.

Gruszecki, a long-time collector of lucky pennies, believes her pieces will help preserve a symbol that is both an object of superstition and a Canadian icon.

“The maple leaf is synonymous with everything Canadian. We all identify with it,” she said in a telephone interview. “Now it’s just no longer going to be present among us, so I’m saddened by that.”

The Bank of Canada’s Currency Museum has already taken steps to preserve the penny’s place in Canadian culture.

A mural consisting of nearly 16,000 one-cent pieces has been assembled at the museum to commemorate the coin’s history, said assistant curator Raewyn Passmore.

The mosaic, which depicts a giant penny measuring about two square metres, is comprised of coins ranging from the lustrous to the tarnished.

Passmore said the design was meant to honour a coin which, while lacking buying power now, enjoyed many years of prominence since its first minting in 1858.

“It was probably the most common coin in circulation at one point and probably the most useful for ordinary people,” she said. “We wanted to make a tribute to a sometimes overlooked coin.”

The penny’s current lack of value was the impetus for its demise, a point recently driven home to Canadians hoping to use their discarded coins to raise money for charity.

Jeff Golby, director of charity bank Chimp Fund, launched a publicity campaign shortly after the last penny was struck in an effort to persuade Canadians to discard their copper coinage into the coffers of cash-strapped organizations.

A massive penny party held in downtown Ottawa netted more than 120,000 cents, but it only served to starkly illustrated the coin’s economic shortcomings.

Canadians who want to dispose of their spare change, Golby said, could find better uses for it than stopping by a charitable penny drive.

“On some level you go, ‘OK, it can’t hurt,’ but when you factor in what it costs to charity . . . in time, in rolling costs, it’s not a cost-effective way for charities to really actually net decent money,” he said.

The logistical challenges associated with the penny were among the reasons Flaherty cited for discontinuing the coin, adding that the economic toll worked out to about $11 million a year.

Retailers will be among the first to phase out the coin, and Canadians will see the effects almost immediately.

The Federal Government has issued guidelines urging store owners to start rounding prices up, or down, to the nearest nickel for cash transactions. Electronic purchases will still be billed to the nearest cent.

Internet search-engine giant Google is marking the passing of our penny with a dedicated doodle on its Canadian homepage.

And while some may lament the one cent coin’s end of days, it’s been a bit of a boon for penny wise entrepreneurs like Gruszecki.

Sales of her jewelry spiked as the coin’s demise drew nearer, she said, adding that Canadians’ disregard for the coin as a form of legal tender has not diminished their sense of its value.

“I hope my jewelry will serve as a means for them to save a penny and keep the penny in circulation,” she said.

“If you’re wearing it on a ring or you’re wearing it around your neck, you keep its visual presence certainly alive. If there can be an additional layer of meaning to it, all the better.”

The Royal Canadian Mint is finally beginning its phase-out of the penny today — and not a minute too soon.

The penny hasn’t made a lick of sense since penny candy started costing more than one cent — and that was before Lester Pearson became prime minister. It’s been costing taxpayers more than its face value to produce since the 1980s.

So good riddance to the feckless penny. Now the Mint should seriously think about getting rid of a couple of other coins that have outlived their usefulness — the nickel and the dime.

Why? Because a century of inflation has robbed them of intrinsic value.

According to the Bank of Canada’s inflation calculator, the Canadian dollar of 1914 had the purchasing power of about $20 in today’s dollars. So a penny then had the purchasing power of 20 cents today. Likewise, a nickel had roughly the same value as a dollar today and having a dime in your pocket a century ago was the same thing as having a toonie now.

The humble penny may have had even more worth back then than the Bank of Canada gives it credit for. Consider that 100 years ago most daily Canadian newspaper cost one cent. The price in competitive Toronto did not rise to two cents until 1917 and that new price held for more than 20 years. Compare that to what you pay for a newspaper today and you get some sense of the real worth of a penny a century ago.

So the penny, nickel and dime were all useful, valuable coins — 100 years ago. Today they just wear needless holes in your pocket or collect in a jar.

Inflation cut the value of the Canadian dollar (and penny) by almost 40% during World War I, the Depression brought it back up in the 1930s (because fewer people had dollars or even dimes in their pockets). World War II kickstarted the economy again but the resulting inflation — and deficit spending — put Canadian currency on a downward spiral from which it has never recovered (despite a much slower rate of decline since the mid-’80s).

By 1948 the dollar (and thus the penny, nickel and dime) had only half the purchasing power it had in 1914. By 1973 the dollar’s purchasing power was only one-quarter of what it was in 1914. And by 1983, a dollar had only one-tenth of its 1914 purchasing power. In the following 30 years of constant (if much-reduced) erosion, the dollar’s real value has declined to only half of what it was even back in inflation-ravaged 1983.

To put this all into perspective, consider the following: If a 1914 penny was worth the equivalent of 20 cents in today’s money and the penny was the smallest coin in use, then Canadian society and business got along just fine without any coins below the equivalent of 20 cents in today’s money.

Not only was there no equivalent of today’s penny, there was no equivalent — or apparent need — for the current nickel or dime either.

New Zealand killed its five-cent coin (worth about four Canadian cents) in 2006 and its economy — and consumer spending habits — haven’t missed a beat. Australia got rid of its one- and two-cent coins way back in 1991 and has been considering eliminating its five-cent coin since seeing New Zealand’s successful downsizing.

Granted, Canada may have a bit more of an emotional attachment to the nickel than others countries since, for much of the 20th Century, we were the only nation in the world to make our “nickels” from pure (well, 99.9 per cent pure) nickel right out of the Canadian Shield.

But those days are long gone. Now the Canadian “nickel” — like our dime, quarter and 50-cent piece — is a slug of steel plated in a copper-nickel alloy. So forget the emotional attachment. And, like the penny, the nickel is fast closing in on the point in time when it will cost more to produce than its worth, even though it’s now 94.5 per cent steel.

Let’s just accept the fact that the nickel should go the way of the penny — into oblivion.

Former Bank of Canada economist Jean-Pierre Aubry was advocating the abolition of the penny a decade before its actual demise. Now he has his sights set on the nickel because it too is getting too expensive to produce and people just aren’t using the coin much anymore.

“We see less and less people now … digging in their wallets for nickels,” Aubry told the Canadian Press recently. “It’s a sign that the coin is not well used.”

As for the dime, well, that may be a harder sell. There could be complications arising from a currency in which the smallest coinage is 25 cents, even though inflation will continue to gnaw away at the real purchasing power of the dollar and its sub-units.

No economist is seriously recommending the demise of the dime — yet.

But inflation’s creep is inexorable and the dime’s day of reckoning is inevitably coming — perhaps not in this decade, but in the foreseeable future. After all, 10 cents today is only worth the equivalent of half a penny in 1914. And even then Canadians knew better than to have a half-penny cluttering up our currency and wearing holes in our pockets.

It’s time to nuke the nickel and start the countdown for the detonation of the dime. Either that or we’ll be nickeled and dimed to death.

]]>http://www.macleans.ca/economy/business/so-long-penny-and-why-dont-you-take-the-nickel-and-the-dime-with-you-too/feed/6The penny receives a short stay of executionhttp://www.macleans.ca/politics/ottawa/the-penny-receives-a-short-stay-of-execution/
http://www.macleans.ca/politics/ottawa/the-penny-receives-a-short-stay-of-execution/#commentsMon, 30 Jul 2012 20:46:25 +0000http://www2.macleans.ca/?p=278647Jim Flaherty announces that the Royal Canadian Mint will stop circulating the penny on February 4, 2013. This year’s budget originally forecast that distribution would cease this fall.The revised …

]]>Jim Flaherty announces that the Royal Canadian Mint will stop circulating the penny on February 4, 2013. This year’s budget originally forecast that distribution would cease this fall.

The revised date was set following initial consultations with small business and retailers who requested the transition date occur after the busy holiday shopping season. This will ensure all those participating in the transition will have ample time to prepare their business, train staff, and better inform consumers. It will also allow charities to hold dedicated ‘penny drive’ campaigns outside of existing fall fundraising drives.

The new transition date will not require new production of pennies, as the existing supply available for circulation remains sufficient to cover the period.

]]>http://www.macleans.ca/politics/ottawa/the-penny-receives-a-short-stay-of-execution/feed/1It was Pat Martin’s ideahttp://www.macleans.ca/politics/ottawa/it-was-pat-martins-idea/
http://www.macleans.ca/politics/ottawa/it-was-pat-martins-idea/#commentsFri, 30 Mar 2012 12:30:17 +0000http://www2.macleans.ca/?p=249730The signature promise of Jim Flaherty’s latest budget was proposed four years ago by the NDP’s Pat Martin.“There is no business case for continuing to produce the penny. Making …

]]>http://www.macleans.ca/politics/ottawa/it-was-pat-martins-idea/feed/29Could the penny die?http://www.macleans.ca/general/could-the-penny-die/
http://www.macleans.ca/general/could-the-penny-die/#respondFri, 14 Jan 2011 17:07:16 +0000http://www2.macleans.ca/?p=166947Nick Kohler discusses the penny's history of hanging on against the odds

]]>A majority of Canadians want the government to get rid of the penny, according to a new poll. The survey found 55 per cent of respondents support scrapping the near-worthless coin, compared to 35 per cent who want to keep it. British Columbians (62 per cent) are the most likely to want the penny gone, followed by Quebec (61 per cent), then Ontario (55 per cent). Men are also more likely than women to want it gone, with 65 per cent supporting its demise, compared to 45 per cent of women. The people most sad to see the penny go? Atlantic Canadians (27 per cent), Manitobans and Saskatchewans (26 per cent).

]]>Mike Moffatt explains why we’re better off without the penny and why eliminating it won’t cause the nation to descend into fractional chaos.

Any change naturally comes with costs and benefits. The only significant cost is to retailers who will have to adapt their point-of-sale systems, a small change for a $130-million-a-year benefit. Prices will not rise and charities will not suffer. Let’s follow the lead of so many other countries around the world and eliminate a coin that no longer serves a useful purpose.

]]>The Senate finance committee is expected to recommend on Tuesday that Ottawa abandon the penny. According to the Canadian Press’ sources inside the committee, it’s been agreed that a century of inflation has made the coin useless. (Since 1908, the coin has lost 95 per cent of its purchasing power, reports the Bank of Canada). Moreover, it now costs more to produce the penny—1.5 cents each—than it’s worth. The Bank of Canada’s research shows eliminating the penny would have a negligible impact on the economy. “On some transactions, the merchant loses and the consumer wins; on some, the merchant wins and the consumer loses,” Pierre Duguay, the bank’s deputy governor, told the Senate finance committee last spring. “However, on balance it evens out.”

]]>http://www.macleans.ca/general/senate-finance-committee-wants-to-kill-penny/feed/16Sheldon + Penny 4Everhttp://www.macleans.ca/authors/jaime-weinman/sheldon-penny-4ever/
http://www.macleans.ca/authors/jaime-weinman/sheldon-penny-4ever/#commentsTue, 11 Nov 2008 17:35:46 +0000http://macleans.wordpress.com/?p=17044I have to admit that I’m enjoying The Big Bang Theory more than How I Met Your Mother this season, at least overall. (TBBT has no depth whatsoever, so it’s…

I have to admit that I’m enjoying The Big Bang Theory more than How I Met Your Mother this season, at least overall. (TBBT has no depth whatsoever, so it’s impossible for it to come up with an individual episode that’s as good as HIMYM’s “Shelter Island.”) What makes the show consistently entertaining is, as everyone knows, the character of Sheldon (Jim Parsons); but more importantly, it’s the relationship between Sheldon and Penny (Kaley Cuoco) that has become the hit of this show. I’ve theorized in the past that comedies, more than any other type of show, depend heavily not on individual characters but on character relationships; a comedy should have at least one character relationship that is so strong that we are actually happy, filled with anticipation, when those two characters have a scene together. For some reason, Sheldon/Penny has become that kind of relationship; along with Liz and Jack on 30 Rock it may be the best comedy relationship on TV at the moment. As we saw in last night’s episode, they have a strange combination of antagonism and mutual respect. She’s annoyed by his insanity and the fact that his friends are too wimpy to stand up to him, but likes the fact that he doesn’t treat her like a bimbo; he’s angered by the way she messes up the sacred routines of his lifestyle, but admires her for not being intimidated by him. Their scenes together are a nice reminder that the best male-female relationships often have nothing to do with sexual tension — since their relationship would not work if Sheldon was sexually attracted to her (or, for that matter, in any human).

On the other hand, Leonard has clearly become the weakest link on TBBT. (The weakest character should have been Penny, who was the weakest character when the show began, but the Sheldon scenes have turned her into a popular character — sort of like Tracey on 30 Rock has been saved from annoyingness by his excellent chemistry with Kenneth.) He doesn’t do much more these days than stand around whining that everybody else is acting crazy.